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UAW boss says health care changes inevitable

United Auto Workers President Ron Gettelfinger said the decline of the Big Three automakers and the rise of their Japanese competitors means the union must accept big changes in its approach to health insurance and other contract issues.
/ Source: The Associated Press

With Ford Motor Co. and General Motors Corp. facing market share declines and financial troubles, United Auto Workers President Ron Gettelfinger told the union’s convention Monday that it’s time for new thinking.

In a speech to about 1,300 members at the UAW’s 34th convention in Las Vegas, Gettelfinger seemed to be preparing the union for a different relationship with the troubled domestic automakers as they face challenging times.

“Like it or not, these challenges aren’t the kind that can be ridden out,” he said. “They demand new and farsighted solutions — and we must be an integral part of developing these solutions.”

Gettelfinger, who also blamed many of the auto industry’s problems on the Bush administration, said a concessionary health care deal with Ford and GM was the most difficult decision he’s made as president.

He said that came after an extensive review of the companies’ finances and was necessary to address the companies’ huge retiree health care liabilities and to preserve future benefits.

Ford and GM workers approved the deals late last year.

Under the agreements, retired autoworkers will start paying monthly contributions, annual deductibles and co-payments for some medical services. They don’t pay such fees now. Hourly workers won’t be required to pay deductibles or monthly contributions, but they will have to contribute some of their future wage increases to a trust for future health care expenses.

In an hour-long speech, Gettelfinger said the nation’s skyrocketing health care costs are hitting Ford and GM hardest because they have older work forces and a large number of retirees. He said a lack of action on a single-payer national health care plan by the Bush administration has hurt the domestic auto industry.

Bush, he said, “has stood on the sidelines as health care costs soar out of control.”

Ford has said it spent about $3.5 billion to cover 550,000 hourly and salaried workers, retirees and dependents last year; GM spent $5.4 billion in 2005 for its 1.1 million employees, retirees and dependents.

Ann Marie Hauser, spokeswoman for the Republican National Committee, blamed the auto industry’s woes on Michigan Gov. Jennifer Granholm, a Democrat.

“No amount of finger pointing by Democrat front groups will create a single job or distract voters from the fact that Governor Granholm’s economic policies have failed Michigan,” Hauser said. “While more than 5.3 million jobs have been created nationwide since September 2003, Michigan continues to move backward and lose jobs as Democrats play attack politics.”

Gettelfinger also urged his troops to battle against corporations that declare bankruptcy and export jobs.

He warned of difficult times ahead as the union fights to preserve a middle-class lifestyle won over the past 70 years, but said the union would surprise managers and analysts who believe it is not ready to fight.

“They think we’ve run out of gas intellectually and emotionally, that we’ve lost our will, our creativity and our nerve. Some even question our solidarity. Well, we’ve got news for them,” he said to a cheering crowd.

“We’re not going to surrender. We’re not going to lower our sights, give up our dreams or give up our fight for a better world for our children and grandchildren.”

Gettelfinger, who has come under fire from some workers who say he hasn’t done enough to keep plants open that GM and Ford have slated to close, said the UAW would continue to defend workers at about two dozen targeted plants. But he added that many workers will be able to retire or get buyout packages that will help them move to new jobs.

GM and Delphi Corp. agreed last week to extend a buyout offer to all Delphi hourly workers. Delphi has filed for Chapter 11 bankruptcy protection and has asked a federal bankruptcy judge for permission to void its union contracts.

The buyouts are a step toward a negotiated settlement of Delphi’s demands for lower wages. The auto parts supplier said the agreement represented “significant progress” in broader negotiations aimed at avoiding a strike.

But Gettelfinger said Delphi is using the bankruptcy process “as a perverted business strategy” to enrich executives, lawyers and financial advisers.

He also said that President Bush and Republican congressional leaders are seeking more tax breaks for millionaires at the expense of workers.

The United States, he told the convention, has lost more than 3 million manufacturing jobs since Bush took over the White House in 2001.